UPDATE: J.P. Morgan Downgrades WABCO Holdings to Neutral, Reiterates $67 PT on Near-Term Risks, Long-Term Positives

In a report published Monday, J.P. Morgan analyst C. Stephen Tusa Jr. downgraded the rating on WABCO Holdings WBC from Overweight to Neutral, but reiterated the $67.00 price target. In the report, Tusa noted, “We view WBC as a high-quality cyclical with (a) an attractive content growth story, (b) a favorable competitive structure, and (c) a strong management team that has managed well through the past downturn. We also see a positive from the 2010 resolution of the EU fine, which increases financial flexibility going forward, and the fact that three of their four largest truck markets (Europe, China, Brazil) are likely at near-term cyclical bottoms. However, the company is still vulnerable to cyclical risks in the near term and, with current estimates/valuation, we think any hiccups in the key truck markets such as Europe or China would pose a risk. Our Neutral rating is based on a view that these near-term risks balance out longer-term positives.” WABCO Holdings closed on Friday at $70.53.